India proposes extending tax breaks for contract manufacturing to 2041, boosting Apple

Published Aug 3, 09:20 AM UTC

India has proposed extending tax exemptions until 2041 for foreign companies that provide machinery to contract manufacturers, a major win for Apple which had lobbied for the change. The draft bill, seen by Reuters, extends a previous exemption valid only until 2031. Apple feared Indian tax laws could treat machinery ownership as a 'business connection', exposing iPhone profits to tax. The extended exemption applies to manufacturers of mobile phones, tablets, laptops, hearing and wearable devices. India also exempted tax on income from storing and providing parts to contract manufacturers in customs-bonded areas until 2041, making such facilities attractive for exports. Separately, India proposed making it easier for foreign companies using data center services to access tax exemptions, and a 15-year tax exemption for foreign diamond miners and traders selling rough diamonds through designated zones. India is set to produce 26% of the world's iPhones in 2026, up from 6% four years ago.